PART 1
Introduction
Merger control is premised on a simple regulatory objective that transactions which may harm competition must be stopped or modified. M&A transactions are becoming increasingly complex every day. Transactions today are implemented through multiple agreements, interconnected steps, and layered commercial arrangements before they take effect. As a result, the formal presentation of a transaction may not always reflect its true commercial substance. Consequently, the substance-over-form principle has assumed a central role in Indian merger control by allowing the Competition Commission of India (“CCI”) to look beyond formal labels and examine transactions as they actually operate.
However, the very feature that makes doctrine necessary also creates uncertainty. Looking beyond form requires the regulator to exercise judgment about what constitutes the “substantive commercial reality” of a transaction. This inquiry cannot be reduced to predetermined categories as transaction structures are increasingly innovative and novel. The greater the CCI’s discretion to look beyond form, the greater the uncertainty for parties seeking to determine their notification obligations in advance.
This tension came into sharp focus in Amazon.com NV Investment Holdings LLC v. Competition Commission Of India & Ors., (“Amazon Case”) where the CCI revisited an already-approved transaction on the basis that material arrangements had not been appropriately disclosed. The challenge, therefore, is not whether the CCI should look beyond form, but how it can exercise this flexibility without undermining the certainty that an ex-ante merger control regime demands.
Evolution of Substance over Form in Merger Control
The doctrine of substance over form is reflected in Regulation 9(4) and 9(5) of The Competition Commission of India (Combinations) Regulations, 2024 (“Regulations”) which replaced erstwhile Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011. It allows the regulator to look beyond the formal labels of a transaction and the scrutiny extends to the substantive commercial reality of the transaction. Section 6(2) of the Competition Act, 2002 requires any person or enterprise proposing to enter into a combination to give notice to the CCI detailing the transaction in accordance with Regulations.
Regulation 9(4) states where the ultimate intended effect of a transaction is achieved through several interconnected steps or smaller transaction, the parties must file one notice covering all the interconnected transactions. Regulation 9(5) requires the CCI to determine notification requirements based on the substance rather than the formal structure of a transaction and disregard structures designed to avoid notification. Both are complementary in nature furthering the objective of preventing evasion of notification requirements and enabling the CCI to look into the substance and commercial reality of transactions. Regulation 9(4) prevents fragmentation of interconnected transactions and Regulation 9(5) prevents parties from using the formal structure of a transaction to circumvent the notification requirement.
The expression ‘substance over form’ may be a more recent articulation of the doctrine, but the underlying principle is by no means new. In Thomas Cook v. CCI the Supreme Court (SC) asserted that Regulation 9(4) enables CCI to consider the “ultimate intended effect” of the transaction executed through inter-connected steps. Additionally, isolation of steps that are inter-connected and interdependent would be against the spirit of the provision and defeat the purpose of section 5 & 6 of the Act. In Vedanta Aluminium, the CCI held that a series of interrelated and interdependent transactions should be assessed as a single composite transaction where the “ultimate objective” can be achieved only upon completion of all the transactions, even if some would not independently require notification or are otherwise exempt.
In GlaxoSmithKline plc/ Novartis AG initially filed three separate notices which CCI considered to be inter-conditional and part of one larger deal. Under Regulation 9(4), the CCI required the parties to file one single notice covering all three transactions. Importantly, the CCI expressly invoked Regulation 9(5) and stated that whether a notice is required must be determined by looking at the “substance of the transaction.” Viewed together, these cases demonstrate the CCI’s focus on the substance of transactions and the use of the principle as an anti-evasion tool, with the Amazon Case giving much-needed recognition to it as an explicit approach.
Amazon Case: From Anti-Evasion to Regulatory Overreach
In 2019, Amazon filed a notice under section 6(2) in Form 1 for its proposed acquisition of Future Coupons Private Limited (FCPL). The transaction was described as involving three key steps i.e. FCPL Share Subscription Agreement, FCPL Shareholders’ Agreement (SHA) and Amazon’s acquisition by Preferential allotment. The notice also referred to Business commercial agreements (BCAs) however, it was stated by Amazon that these were not inter-connected or a part of the notified combination. On 28th November 2019, CCI granted approval but shortly thereafter FCPL filed an application raising concerns regarding the correctness and the completeness of the disclosures made in the notice.
CCI reopened the enquiry and held that the disclosures made were not enough for CCI to assess the real scope of the transaction and that key arrangements having implications on rights and interest sought to be acquired were notified as unconnected with the combination. Vide order dated 17 December, 2021 Amazon was directed to file fresh notice in Form II and approval dated 28.11.2019 was kept in abeyance. The NCLAT upheld CCI’s order and agreed that the non-disclosures concerned the CCI’s ability to assess the combination. The NCLAT order was challenged before the SC.
One of the CCI’s main contentions is worth setting out in full, because it shows just how far the doctrine was stretched in this case. CCI contended that all agreements formed part of “one integrated commercial understanding” and treating them as unrelated prevented a proper appreciation of the transaction in its true scope, while placing reliance on regulation 9(4) and 9(5). It was further argued that the transaction was presented as an investment in FCPL, with no direct or indirect acquisition of FRL shares or rights, while FRL-related rights were characterised as limited investor protections derived through FCPL.
Accordingly, it was contended that the complete and correct combination had not been notified as required by Section 6(2) of the Act read with the Regulations, thereby attracting Section 43A of the Act. Substance over form therefore became central to the CCI’s justification for reopening the approved transaction as the doctrine allowed it to assess the combination based on its actual commercial substance. The CCI portrayed this intervention as corrective action aimed at rectifying the effect of incomplete or misleading disclosure. The SC, in its judgment dated 27 May 2026, set aside both the CCI’s order and the NCLAT’s judgment upholding it.
The Cost of Flexibility and Limits of the Doctrine
The author identifies that the manner in which CCI applied the doctrine in the Amazon Case produces two types of uncertainty: temporal uncertainty and substantive uncertainty. Temporal uncertainty is about when a transaction can be reopened. The CCI repeatedly emphasised that merger control in India is ex-ante in nature, yet reponed enquiry into an already approved transaction causing temporal uncertainty. This creates uncertainty for parties to M&A transactions, who may remain constantly worried that a transaction which has received regulatory approval could nevertheless be revisited by the CCI at a later stage.
The second concern is substantive uncertainty i.e. whether a party can know, at the time of filing, that its disclosure will be treated as sufficient. A difficult position arises when a party who has disclosed everything is still found non-compliant simply because the CCI’s adopts a different view or characterisation. In the present case CCI argued that the SHA & BCAs were not notified as interconnected steps, but were disclosed only in an under-characterised manner which in turn understated the true effect.
The problem becomes particularly significant where M&A transactions involve novel and differently structured arrangements. While substance over form is necessary to prevent parties from structuring transactions to evade merger scrutiny, its expansive application can make undermine the predictability that ex-ante merger control is expected to provide. Such uncertainty creates the possibility of over-deterrence, as parties may respond by adopting excessively cautious approaches to notification or by structuring transactions differently than they otherwise would.
The concern is not with the CCI possessing flexibility to look beyond the formal structure but with the uncertainty it creates when that flexibility operates without predictable boundaries. The challenge, therefore, is to preserve substance over form as an anti-evasion tool while ensuring that parties can confidently structure and notify transactions. Against this background, the question that remains is whether the Supreme Court’s decision sufficiently resolved this uncertainty created by the CCI’s application of the doctrine or does the uncertainty still persist.
PART 2
Part I argues that substance over form is an essential anti-evasion tool in Indian merger control, particularly as increasingly complex and novel transaction structures make formal labels inadequate. However, the expansive application of the doctrine in the Amazon Case demonstrates how regulatory flexibility can generate temporal and substantive uncertainty for parties. While the Supreme Court addressed some of this uncertainty, broader concerns remain regarding the predictability of determining interconnected transactions.
Indian merger control is ex-ante in nature and parties must be able to assess their obligations and regulatory compliances before committing to transactions. At the same time the regulator must retain some flexibility to prevent anti-evasion techniques by firms and welfare-reducing transactions. Substance over form principle therefore occupies a difficult position between certainty and flexibility, enforcement and restraint, and under-deterrence and over-deterrence. The question, therefore, is not whether substance should prevail over form, but how far that principle can extend without undermining the predictability of merger control.
Supreme Court’s Intervention: An Incomplete Fix
The Supreme Court addressed the concerns surrounding the CCI’s application of substance over form by placing important limits on its exercise. With regard to temporal uncertainty, the Court relied on the proviso to Section 20(1), which imposes a one-year limitation on the CCI’s power to initiate an inquiry from the date the combination takes effect. By imposing this temporal limitation, the Court enhances predictability and provides greater certainty to parties once the prescribed period has elapsed.
The Court’s intervention also addresses the concern surrounding substantive uncertainty in a limited sense. The Court’s clarification that mischaracterisation, by itself, does not amount to non-notification addresses the specific difficulty faced where a party has disclosed the relevant material but the CCI adopts a different characterisation of it. This constrains the retrospective and discretionary application of the doctrine and prevents a difference in characterisation from being automatically treated as a failure to notify.
The judgment therefore resolves the uncertainty created by treating mischaracterisation as non-disclosure, but does not eliminate the broader uncertainty inherent in determining the true nature of a transaction. This leaves open the question of how the CCI can preserve the flexibility necessary to detect evasive transactions while ensuring sufficient predictability for parties engaging in legitimate M&A activity.
Uncertainty and the Type 1/Type 2 error trade-off
The uncertainty is not merely a by-product of how the CCI applied the doctrine in the Amazon Case, but it’s an implication of the doctrine itself. The CCI treats two or more transactions as inter-connected where they share common parties, corporate groups, economic objectives, transaction documents, conditions, or negotiation processes, and/or occur within a roughly two-year window. These factors however, are only indicative and not exhaustive since the CCI undertakes a case-by-case analysis while applying the principle of “substance over form.”
This means the same set of indicative factors can lead to different outcomes depending on how the CCI reads the commercial reality of a given deal. An erroneous assessment of inter-connection can have severe consequences including financial penalties, disruption of the transaction, and reputational harm. Given these stakes, determining the scope of a transaction correctly at the notification stage is critical for dealmakers. The standard of “substantive commercial reality” requires a case-by-case enquiry of substance rather than an ex-ante checklist.
To understand why this standard is costly and not just inconvenient, the author draws on Frank Easterbrook’s article The Limits of Antitrust, which frames antitrust enforcement as a choice between two kinds of error. A Type 1 error is a false positive where conduct that is not actually anticompetitive is punished or blocked. Applied to merger control, this occurs when a pro-competitive or benign merger is blocked. An overly broad application of the doctrine risks catching transactions that pose no real threat to competition, including mergers that would have been welfare-enhancing, most likely causing over-deterrence.
A Type 2 error is a false negative, where anti-competitive conduct goes undetected or is allowed to proceed. In merger control, this can be termed as under-deterrence. If the doctrine is applied in a narrow manner firms may use tactics which conceal the true nature of the transaction while being legally compliant with the requirements of the notice and welfare-reducing mergers could be approved without sufficient review.
The author argues that the application of the doctrine involves a choice between two types of errors that the merger control regime may incur. A narrow application of substance-over-form protects certainty but risks Type 2 errors whereas a broad application provides protection against evasion but risks Type 1 errors. Deterrence is one of the main objectives of the merger control regime. The aim is to promote healthy and sustainable competition. Errors are an inevitable feature of merger control, since regulatory authorities cannot perfectly predict the competitive effects of a proposed transaction. Since both errors carry real costs, the question is not whether error can be eliminated, but which error Indian merger control is better positioned to bear.
Way Forward
The application of the doctrine of substance over form in merger control requires a balanced and nuanced approach. The objective should be to minimise the aggregate cost of both errors through better timing and predictable standards. The CCI must preserve the doctrine as an important anti-evasion tool ensuring that its application is not too expansive. A narrow application may allow anti-competitive transactions to escape scrutiny, resulting in Type 2 errors, whereas an excessively expansive application may deter legitimate and welfare-enhancing transactions, resulting in Type 1 errors. The CCI’s objective in applying the doctrine, should therefore be to minimise the overall cost of Type 1 and Type 2 errors. Achieving this balance depends significantly on the manner and stage at which the doctrine is applied.
To solve the problem of temporal uncertainty, the doctrine should operate primarily as an ex-ante regulatory tool. The CCI should apply it at the notification stage, independently examining the transaction to determine its substantive scope. The SC’s clarification that a difference in characterisation of material already disclosed places a greater onus on the CCI to independently scrutinise transactions at the notification stage and get its assessment right at the outset.
With regard to substantive uncertainty, the CCI’s existing pre-filing consultation mechanism provides relief by allowing parties to seek guidance on matters such as interconnected transactions, notification requirements etc. This preserves the CCI’s flexibility to assess novel structures on a case-by-case basis while giving parties that engage with the process in good faith some measure of certainty. Such guidance can reduce uncertainty without creating a rigid checklist that parties could exploit to circumvent the law.
This approach to application of the doctrine also serves a broader purpose. The SC’s emphasis on stability and predictability is particularly important to India’s objective of promoting ease of doing business and attracting investment. A predictable regulatory framework strengthens investor confidence, particularly in cross-border transactions where regulatory uncertainty in one jurisdiction may influence investment decisions and transaction structuring across multiple markets. The implications of the CCI’s approach consequently extend beyond individual parties to India’s broader economic development. The CCI must prevent harmful concentrations while simultaneously providing businesses with confidence in the finality and predictability of regulatory outcomes. As the SC observed “domestic institutions should not add to uncertainty arising from broader global economic and geopolitical conditions.”
Accordingly, the CCI should adopt a predictable flexibility approach. Predictability should not come at the cost of effective enforcement; rather, it should ensure that enforcement itself operates within a stable and credible regulatory framework. Flexibility to examine the true substance of transactions through the doctrine, coupled with predictability in the standards by which that substance is assessed. The legitimacy of the doctrine will ultimately depend on both its ability to detect genuine evasive transactions and the manner in which the CCI exercises this power without compromising certainty, stability and investor confidence.
(This post has been authored by Avni Shrivastava, a third-year B.A. LL.B. (Hons.) student at the National Law University Odisha)
CITE AS: Avni Srivastava, ‘The Substance Over Form Doctrine: Redefining Merger Control in India’ (The Contemporary Law Forum, 12 November 2026) <https://tclf.in/2026/11/12/the-substance-over-form-doctrine-redefining-merger-control-in-india/> date of access.